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A federal judge said Thursday, July 23, that he is likely to deny DraftKings’ bid to dismiss a class-action lawsuit alleging the fantasy sports company runs illegal gambling operations in California.
US District Judge Charles Breyer told both sides his initial view is that the plaintiffs have standing to sue and that the paid daily fantasy sports contests at issue are likely prohibited under state law. A ruling on the motion to dismiss was expected within a week of the hearing; as of this writing, no decision has been issued.
In addition to daily fantasy sports, DraftKings also operates DraftKings Online Casino as well as an online sportsbook and a prediction market in various US jurisdictions.
How the lawsuit against DraftKings began
DraftKings users Zhicheng Zhen and Jonathan Smith sued the company in June 2025, alleging it misrepresented the legality of its paid contests. Because most commercial gambling is illegal in California, Breyer said he would assume for purposes of the motion that the games were unlawful, a characterization DraftKings disputes.
The original complaint cited two California consumer protection statutes: the Unfair Competition Law and the Consumer Legal Remedies Act. Plaintiffs later amended the complaint to add claims under the Racketeer Influenced and Corrupt Organizations Act and a request for declaratory relief.
Breyer appeared unpersuaded by the RICO and stolen-property theories but said the core consumer protection claims were on firmer ground and could support an injunction.
A second chance after a December dismissal
This is not the case’s first brush with a motion to dismiss. Breyer previously threw out the complaint in December 2025 but granted the plaintiffs leave to amend after finding they had failed to establish that monetary damages were an inadequate remedy.
At Thursday’s hearing, Breyer said he found the plaintiffs’ argument that they suffered economic injury persuasive, since they say they were induced to hand over money for contests DraftKings represented as legal.
Bonta’s 2025 opinion still looms large
The case is rooted partly in a July 2025 legal opinion from California Attorney General Rob Bonta, whose office concluded that daily fantasy sports contests are illegal under state law regardless of where an operator or its servers are based.
Attorney General opinions are not binding on courts, but they can influence how judges approach related disputes, and Breyer’s comments echoed some of Bonta’s reasoning. The judge noted that DraftKings spends heavily to assure customers its games are legal, which he said undermines any argument that legality doesn’t matter to consumers.
Both sides clash over what counts as harm
Attorney Richard Patch, representing DraftKings, argued the case should be dismissed because the plaintiffs received exactly what they paid for: contests conducted under stated rules, with no deception about outcomes.
According to a report by Courthouse News Service, Patch told the court the company has “operated DFS contests openly, honestly, and permissibly in California since 2012,” and argued that legality was a separate question from whether players got the experience they paid for.
Breyer wasn’t convinced. He pointed out that claims about legality appear throughout DraftKings’ advertising and said it was hard to argue such claims carry no weight with consumers.
Plaintiffs’ attorney Wesley Griffith made a similar point, comparing DraftKings to Amazon — a company whose customers rarely question whether a purchase is legal — and argued that a product’s legal status matters to fantasy sports players, making DraftKings’ representations relevant to the transaction.
Injunction against California contests now a real possibility
Breyer’s comments suggest that if the case clears the motion to dismiss, a fight over a broader injunction against DraftKings’ paid contests in California could follow. The judge stopped short of committing to that outcome, but said the logic follows: if standing exists and the law applies as he currently understands it, blocking the games would be a natural next step.
Neither DraftKings nor attorneys for the plaintiffs responded to requests for comment after the hearing, according to Courthouse News. Until a ruling comes down, DraftKings’ paid daily fantasy contests remain active in California. The outcome could shape how fantasy sports operators market their products nationwide, and rival operators are watching closely.
California remains one of the nation’s largest states without legal online casinos or online sports betting. Residents can still legally visit tribal casinos, play the California Lottery, wager on horse racing, and participate in certain daily fantasy sports contests, though the legality of paid DFS remains the subject of ongoing litigation.
